A criminal grand jury has indicted Phil Lester and Susan Laferte for allegedly defrauding investors of millions of dollars over a period of eight years, while acting as CEO and CFO of Gold Country Lenders, respectively.
Lester and Laferte already were facing 66 felony counts of elder abuse, securities fraud and conspiracy that had been filed in September by California Attorney General Maggy Krell and had been set for a preliminary hearing into the evidence in March.
But Krell opted to seek a grand jury indictment instead; that indictment, which was announced in Nevada County Superior Court Thursday afternoon, supersedes the original complaint against those two defendants.
The criminal complaint filed by Krell originally also named Lester’s wife, Ellen, as a co-defendant.
Krell dismissed two felony counts of conspiracy and securities fraud against Ellen Lester Nov. 19 but indicated at the time she might refile.
That is no longer the case, however, according to Ellen Lester’s court-appointed attorney, David Alkire.
“Maggy Krell informed me after court today that she will not be proceeding against Ellen Lester,” Alkire said. “The case (against her) is done.”
A fourth co-defendant, Jonathan Blinder, still faces four felony counts of securities fraud, and his preliminary hearing remains set for March 12.
But Blinder’s attorney, Malcolm Segal, said he “remains hopeful” that charges will be dismissed against his client as well.
According to Segal, the grand jury indictment did not include any of the original charges involving Enlibra, which were the only ones involving Blinder. A copy of the indictment was not available as of press time.
“If the grand jury considered those (charges) and did not file, that’s a good indication of the way this case is going,” Segal said. “We remain hopeful and confident that after further review, charges will be dismissed before the preliminary hearing.”
Segal would not comment further on whether Blinder was a target of the grand jury investigation, which is a confidential hearing.
In California, the grand jury system consists of 58 separate grand juries, one in each county, that are convened on an annual basis by the Superior Court to carry out three functions: investigating and reporting on the operations of local government, which is a civil, rather than criminal function; issuing criminal indictments to require defendants to go to trial on felony charges; and investigating allegations of a public official’s corrupt or willful misconduct in office and, when warranted, filing an accusation against that official to remove him or her from office.
Typically, grand juries throughout the state spend considerably more time on investigating and reporting on local government operations than they do on criminal matters. Criminal cases in Nevada County very rarely go to a grand jury; this case was actually heard by a grand jury in Sacramento, sources said.
If a prosecutor opts to convene a criminal grand jury, the defense attorneys are not present, and there is no discovery, said Nevada County Assistant District Attorney Anna Ferguson.
“It’s the prosecution alone with the grand jury and the witnesses,” she said. “It’s very, very unique compared to the normal jury process.”
The prosecutor is required to present any exculpatory evidence that might prove the defendant’s innocence, which puts the ball in the defendant’s court. The defendant can opt to provide the prosecutor that information or not.
Krell previously declined to comment on why she chose to seek an indictment rather than proceed to the preliminary hearing that already had been scheduled.
Ferguson said that during her career, she has chosen to take that course “as a way to fast forward around the preliminary. … I’ve done it when the case was old, and I wanted to get it to trial more quickly or if the case was very complicated.”
Another typical reason is if a prosecutor wants to (at least temporarily) avoid allowing defense counsel to cross-examine witnesses, several sources said.
Lester and Laferte pleaded not guilty to the charges in the grand jury indictment, and the prior case against them was dismissed.
A trial date was set for April 9, and they next will be in court for a pre-trial conference Feb. 28.
“I was surprised Maggy Krell did not waive time and set the trial date so soon,” said Laferte’s court-appointed attorney, Greg Klein, who indicated in court that he likely will file a motion to postpone the trial.
To contact Staff Writer Liz Kellar, email email@example.com or call 530-477-4229.